• OUTLOOK ARENA
  • VIEWS ON NEWS
  • DECEMBER 15, 1999

Mangalore Refineries...sinking in oil

Mangalore Refineries and Petrochemicals (MRPL) is facing inventory problems arising from an inability to market its products. The company also tried to export 40,000 tonnes of furnace oil but cancelled the tender since the prices were unremunerative.

MRPL is a joint venture between the A.V. Birla group and Hindustan Petroleum (26% equity stake each). The refinery has been battling containment problems since the commissioning of its expansion from 3 million to 9 million tonnes.

Last month the refinery had to shut down for about a week because of surplus diesel. This month, the problem is with surplus furnace oil. Shutting down a refinery is an extreme measure and involves huge energy losses. The refinery has about 30 days of storage capacity but production has to be stopped when the tanks start overflowing.

The refinery produces about 100,000 tonnes of the product every month, which it is finding difficult to sell within the country. Incidentally, both Indian Oil and Bharat Petroleum are importing furnace oil in Mumbai. However, the cost of shipping MRPL products from Mangalore to Mumbai makes it more expensive than imports.

Furnace oil is a free product and with a major battle on for market shares, bottomlines are under pressure. MRPL is likely to have offtake problems till the demand picks up.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407